“People think the whole crisis will get worse before it gets better,” said Ray Remy, head of fixed income in New York at Daiwa Capital Markets America Inc., one of 21 primary dealers that trade directly with the Fed. “I don’t see any optimism.”

Most Expensive

A valuation measure showed U.S. government bonds are at almost the most expensive levels ever. The term premium, a model created by economists at the Federal Reserve, was at negative 0.85 percent after reaching negative 0.94 percent, the record, on June 1. The average over the past year is negative 0.46. A negative reading indicates investors are willing to accept yields below what’s considered fair value.

Treasuries investors raised bets the price of the securities will drop and remained “net short” for a second week, according to a survey by JPMorgan Chase & Co.

The proportion of net shorts was unchanged at six percentage points in the week ending June 11 as outright shorts rose to 19 percent from 17 percent the previous week and outright longs rose to 13 percent from 11 percent. A short position is a bet that an asset will decrease in value, while a long is a wager it will increase.